Wednesday, May 31, 2006

I have found a way to consistently trade the last few days with a solid profit. I'm hoping I get some real choppy markets so that I can test my new strategy. I talked about ETF arbitrage in one of my old blogs I no longer write in. I said that it was not worth the effort and that I didn't have the advanced software needed to make money at it. Well, these last few days I have been doing ETF arbitrage on my favorite sector; OIL. I've made movies, and you can see for your own eyes how well this strategy works, but in order for you to trade this way you have to use hotkeys and be prepared to react to an oppurtunity in no less then 2 seconds. My average trade is held probably 1-2 minutes.

Consider this. If you are following the leader stock and using it to trade the laggard stock to gain your profit, why not hedge your position with buying multiple laggard stocks instead of just one, that way your are diversified or "hedged" in the postition.